Category: US Housing
The analysis published under this category are as follows.Monday, July 16, 2007
Mission Accomplished: 3 Housing Issues: Multiple Bottoms, Declining Dollar, and More Sub-prime and Alt-A Defaults / Housing-Market / US Housing
It is said that the definition of insanity is doing the same thing over and over and expecting a different result. If we adhere to this definition, housing pundits must be clinically insane because since the middle of 2006 we've been hearing rhetoric of “yes, today we've reached bottom.” Amazing how these folks live on one way streets. During the past seven years, each new record high was welcomed and when asked if this was a peak most would respond that the sky was the limit. No end in their immediate future. If up to them, housing would appreciate 20% each year until the end of time.
Read full article... Read full article...
Thursday, July 12, 2007
Where Are All The Homebuilder Bargains? / Companies / US Housing
Brady Willett & Todd Alway write: With U.S. homebuilder confidence slipping to a 16-year low in June and subprime contagion fears omnipresent, no one seemed to notice when Toll Brothers reported a 93.5% increase in its ‘Provision for inventory write-downs/write-offs' for the six-months ending April 2007. However, as the losses and/or inventory write-downs at Toll and other builders mount in the coming quarters, the carnage could prove difficult to ignore. After all, following more than a decade of truly spectacular gains, the good times for U.S. homebuilders are over.Read full article... Read full article...
Saturday, July 07, 2007
Comparative Analysis of 3 U.S. Cities: Contrary to What Your Parents Told You, Not all Bubbles are Created Equally / Housing-Market / US Housing
As we are witnessing the mortgage debacle unfold in California, there are other parts of the country that felt very little impact by this seven year credit bubble. For the most part, this bubble has been isolated to coastal metro areas. Not uncommon in beach locales, housing in prime locations always yields a commanding price in the market. But to what extent? Actually to the extent the market can sustain the price, sellers will ask for Pollyanna if they have the inclination they will get it. Yet this desire for higher and riskier mortgages has added fuel to a housing craze unparalleled in history.Read full article... Read full article...
Sunday, July 01, 2007
So Much for the Spring House Selling Season! / Housing-Market / US Housing
Mike Larson writes: I'm an optimist. No, really. In "regular life," I like to look at the bright side of things. Anyone who has known me for a long time will tell you the same thing.
But when it comes to the markets, I don't mess around. Starry-eyed optimism is a recipe for disaster. You have to approach trading and investing in a cold, rational manner. I don't care if you're talking about bonds, stocks, real estate, or anything else.
Read full article... Read full article...
Thursday, June 28, 2007
The Housing Tipping Point. 3 Factors That Will Burst the Bubble: The Negative Wealth Effect, Negative Press, and Suffocating Debt Payments / Housing-Market / US Housing
As the Fed does an ostrich impression by sticking its head in the ground and pretending everything is okay, we are facing an economic tipping point ushered in via housing. The Fed has left the key interest rate steady once again. At this point, they are backed to a wall because lowering rates will signal that the economy is weak and needs additional help thus stunting consumer confidence. If they raise rates, they accelerate the bursting bubble because debt service on millions of American's mortgages will go higher thus taking money away from the national past time of mall shopping. We are quickly approaching a global tipping point.
Read full article... Read full article...
Wednesday, June 27, 2007
So, the US Housing Recession Is Contained? / Economics / US Housing
That's the conventional wisdom, but recent reports from retailers might suggest otherwise. Early in June, Bed Bath & Beyond issued a profit warning. BB&B's chief executive, Steven Temares, said: "Based upon what we have experienced and has been reported by others, the overall retailing environment, especially sales of merchandise related to the home , has been challenging" (emphasis added).Read full article... Read full article...
Wednesday, June 20, 2007
Irrational Housing: Insiders Out Early and the Duesenberry Effect / Housing-Market / US Housing
Markets operate under the assumption that key players act rationally in most circumstances. Their premise is such that market stability is based on people acting to a set of according rules. Much has been debated about this because economics as a science is cold and aloof; it is a matter of simply stating the facts. Yet we have learned in the recent housing mania that market psychology and behavioral economics play a large role in how people interpret risk and what constitutes an investment.Read full article... Read full article...
Tuesday, June 19, 2007
Subprime Mortgage Problems Quarantined? Ask the Home Builders / Housing-Market / US Housing
The National Association of Home Builders (NAHB) index of current sales of new single-family homes edged down a tick to 29 in the June survey, the lowest reading for this housing cycle and the lowest reading since early 1991 (see Chart 1). Why? I will let David Seiders, the NAHB's chief economist, tell you in his own words: "It's clear that the crisis in the subprime sector has prompted tighter lending standards in much of the mortgage market, and interest rates on prime-quality home mortgages have moved up considerably during the past month along with long-term Treasury rates."Read full article... Read full article...
Sunday, June 17, 2007
America's Codependence on Housing: 30% of Job Growth Contributed by Real Estate. Five Point Plan on how the Bubble Will Burst / Housing-Market / US Housing
America has gone housing crazy. In the last six years, housing has contributed to 29% of total employee additions. How does this equate to past decades? Let us take a look:
1971-1979: 10%
1980-1989: 12%
1990-1999: 10%
2000-2006: 29%
Friday, June 15, 2007
Homebuilders Stocks Rallying : How could this be? Part II / Housing-Market / US Housing
My trading strategy is fairly simple. I identify a dominate theme and then buy leading stocks in that theme. This has worked quite well for me over the years. Back in the good old days it was the Internet and stocks like AOL (TWX), CMGI (CMGI), Cisco (CSCO), Intel (INTC) and Microsoft (MSFT). Over the past three years, it has been industrialization of the emerging markets. This led to the formation of my Big Build-Out (BBO) portfolio and stocks like Companhia Vale do Rio Doce (RIO), Southern Copper (PCU) and BHP Billiton (BHP). Read full article... Read full article...
Tuesday, June 12, 2007
Housing Market Crashing? Yes, In Slow Motion / Housing-Market / US Housing
Interesting video on the US housing market crash by Itulip.Read full article... Read full article...
Monday, June 11, 2007
So-Called Fed Model Suggests Housing Market Is Over-Valued / Economics / US Housing
Better late than never, huh? The so-called Fed model is often used to gauge the under-over-valuation of corporate equities by comparing the earnings yield on, say, the S&P 500 with the yield on the Treasury 10-year security. The same kind of analysis can be applied to owner-occupied housing by dividing the "earnings" or services produced by owner-occupied housing by the market value of that housing. The services produced by housing are estimated by the Bureau of Economic Analysis in its National Income and Product Table 2.45U, line item "Personal Consumption Expenditures: Owner-Occupied Nonfarm Dwellings: Space Rent."Read full article... Read full article...
Saturday, June 02, 2007
What a Housing Market Recovery Will Look Like - Housing Bust Recovery in 1930s / Housing-Market / US Housing
The housing bust is here and we can all expect home prices to decline every year for years to come. However, recovery will eventually happen and when today's market seems bad just take a look at this video to know what a recovery looks likeRead full article... Read full article...
Friday, June 01, 2007
Price is Everything in Today's Housing Market! / Housing-Market / US Housing
Mike Larson writes : There is demand for housing out there. Yes, you heard me right — people are willing to buy homes.
There's just one catch: The prices have to be low!
That's one message from the April housing data. The other is that we are literally swimming in homes for sale — condos, town houses, single-family homes, you name it!
Let me tell you what this means …
Read full article... Read full article...
Thursday, May 31, 2007
Real Estate Bubbles and California's Economic Growth, Video Lecture Part 1 / Housing-Market / US Housing
An economics video presentation at Humboldt State University. Special guest lecturer Dr. Christopher Thornberg of Beacon Economics discusses the current housing bubble and its effects on CaliforniaRead full article... Read full article...
Monday, May 28, 2007
The California Housing Report: Details In the Data Show A Broad-based Price Decline / Housing-Market / US Housing
Headline: "C.A.R. [California Association of Realtors] reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago." Then we also read, "Throughout the state inventory levels have increased to their highest levels in recent years..."
Price increase in the climate of declining sales and rising inventory? Something doesn't add up.
Read full article... Read full article...
Wednesday, May 23, 2007
Homebuilders Stocks Rallying : How could this be? / Housing-Market / US Housing
Since bottoming on April 12th, the SPDR Homebuilders ETF (XHB) is up 12.5%; twice as much as the S&P 500's gain of 6%. If you are surprised by that statement you are not alone. I still find it hard to believe even after staring at the chart.Read full article... Read full article...
Tuesday, May 22, 2007
Investment Flash: Derivatives Say Bernanke Will Be Wrong / Housing-Market / US Housing
U.S. mortgages in foreclosure rose in April 62% from a year ago according to RealtyTrac Inc. Folks are increasingly losing their homes as we warned last October . Attempting to allay fears, Federal Reserve Chairman Ben Bernanke spoke last Thursday: "We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." We clearly disagree.
Credit Suisse's ARM Reset Schedule, included in our last report , shows that over $1 Trillion dollars worth of adjustable rate mortgages will reset over the next 5 years. Bloomberg is just now reporting on the extent of the subprime meltdown . Even more telling is what credit derivative market charts are showing.
Read full article... Read full article...
Wednesday, May 16, 2007
US Housing Sector is Crashing, False Housing and Jobs statistics to eventually benefit Gold / Economics / US Housing
The newest deceptions are with jobs and housing. Each is much worse than reported. The housing decline might be as much as 15% worse than reported, which leads to much bigger job loss than is reported. Most of the home construction job loss is under the table, to people not on state jobless insurance programs, and to immigrant workers paid in cash. Both fall through the statistical cracks in those home frames and plywood floors underlayments. A quick preface on the two biggest corrupted statistics first, since of paramount importance.
The US Federal Reserve will likely respond to more rapid job loss, and to more rapid home sector erosion decline. When they do, expect an official rate cut sequence to resemble that of 2001. As in, sharp & sudden. The signals surround us, that the major powers are in the process of permitting the USDollar to fall.
Read full article... Read full article...
Thursday, May 10, 2007
Inventory and Sales Of Single Family Homes In Santa Clara County / Housing-Market / US Housing
The median price for the county in April increased 12.1%, YoY, more than I expected, led by increased prices and volume in high-priced areas like Cupertino, Los Gatos and Palo Alto.Read full article... Read full article...